Madonna Makes a $60 Million Deal

By STEPHEN HOLDEN

Published: April 20, 1992

Pop music's original Material Girl is about to become a multi-media mogul. Time Warner plans to announce an agreement today in which Madonna, in partnership with Time Warner, will form her own multi-media entertainment company, Maverick. Under a 7-year arrangement, which can be extended to 11 years, Madonna, who is 33 years old, will be advanced as much $60 million, making this one of the most lucrative contracts offered to a pop star. The long-term commitment is comparable in scale to a similar deal that Sony signed last year with Michael Jackson.

Although Time Warner executives would not confirm figures that have been widely circulated, Madonna's renegotiated recording contract is said to give this singer a $5 million advance for each of her next seven albums and a 20 percent royalty rate. This would put her royalty rate on a par with Mr. Jackson's, which is the highest for any artist in the music business.

Both in its size and in the autonomy it confers, the agreement is unprecedented for a female pop entertainer. Success Across the Board

Since her recording debut in 1983, Madonna's albums, released through Sire Records, a Time Warner label, have sold over 70 million copies worldwide. Her most recent release, "The Immaculate Collection," an anthology of her hits, has sold 11 million copies, 3 million in the United States. Her five home video collections have sold three million copies around the world and "Truth or Dare," the 1991 concert tour documentary, grossed $16 million in the United States. Time Warner said that over the last decade sales of Madonna-related ventures have grossed $1.2 billion.

Maverick will be run by Madonna and her longtime manager, Freddy DeMann, and have its headquarters in Los Angeles. It will consist of a record company and a music publishing company, and will have television, film, merchandising and book-publishing divisions. 'To Have More Control'

Madonna said in a recent interview from Los Angeles that she envisioned the company as an "artistic think tank" and likened it to a cross between the Bauhaus, the innovative German arts institute formed in Weimar in 1919, and Andy Warhol's New York-based Factory of artists and assistants.

"It started as a desire to have more control," Madonna said. "There's a group of writers, photographers, directors and editors that I've met along the way in my career who I want to take with me everywhere I go. I want to incorporate them into my little factory of ideas. I also come in contact with a lot of young talent that I feel entrepreneurial about."

Time Warner is thought to have committed over $2 million a year in operating expenses for Maverick, whose most significant component will be a record company run in 50-50 partnership with the parent corporation. The first project for the label will be a new Madonna album, as yet untitled, to be released in the fall.

"In my view, we are not taking a risk here," said Gerald M. Levin, the president and co-chief operating officer of Time Warner. "There are certain people on whom you could stake everything and still sleep comfortably at night, and Madonna is one of them."

Mr. Levin cited the Madonna agreement as a critical step in helping to bring the divisions of Time Warner closer together through Madonna-generated work that had multiple lives in music, film, video and book formats. Time Warner has a similar but looser arrangement with Quincy Jones, the record producer and former jazz trumpeter who has developed a number of television projects for the company and has his own Warner record label, Qwest.

Time Warner has three major divisions: publishing, music and entertainment, with the entertainment division encompassing the film studio, television production (including HBO) and a cable company.

Within the entertainment industry, Madonna's arrangement with Time Warner is not receiving the skepticism that attended the announcements of several other major record deals in recent months. The record deals of $30 million to $50 million for such aging rock bands as the Rolling Stones and Aerosmith and for singers including Janet Jackson were sharply criticized by many for being risky and for bidding up the price of talent. Even Michael Jackson's contract with Sony, which guarantees him roughly the same terms as Madonna's arrangement with Time Warner, raised some eyebrows. 'A Great Talent'

"Madonna's deal is certainly extraordinary," said David Geffen, the entertainment mogul. "But I think she's a great talent with a great will, and if she wants to do something she'll do it. She works very hard, takes big risks and stays at the cutting edge of what's happening."

"If anyone is going to get a deal of this magnitude, she is the kind of artist to give it to," he said. "She's the exception: someone who taps into artists and musical genres before the rest of the world does. In other deals where artists get their own labels, such perks are usually window dressing to satisfy their egos. Madonna's different. I would bet on her to make something more of it."

The first two projects to come under the umbrella of the new agreement are a forthcoming Madonna album, as yet untitled, and a coffee table book of photographs featuring Madonna.

Madonna described the album, whose songs she has already written, as "soulful, with a jazzy undertone and lot of beatnik-style poetry in it."

Under the agreement, Time Warner's film division has the right of first refusal for any film projects developed by Maverick. One project that Madonna is seeking to develop is a film version of James Baldwin's novel "Giovanni's Room," to be directed by Alek Keshishian, who directed "Truth or Dare."

She has also been talking with HBO about developing another longtime pet project, a film biography of the Mexican artist Frida Kahlo, who was married to the muralist Diego Rivera and who Madonna says is among her idols.